1.1.5 specialisation and division of labour

Question 1

what does the division of labour involve

Answer 1

Division of labour involves splitting work up into specialised tasks performed by specialist workers. Indeed division of labour is often referred to as specialisation.

Question 2

what is the opposite of specialisation

Answer 2

self-sufficiency

Question 3

An example of division of labour

Answer 3

Two men try to make both bits and bobs by spending half of their working day on each activity i.e. they do not specialise. This results in the following production possibilities; If they were to follow the division of labour principle and specialise only in that activity where they have the greatest relative advantage then it would be possible for them to increase their combined daily output.

Question 4

How is productivity measured

Answer 4

Productivity is measured by output per worker or per unit of time

Question 5

Why does productivity rise from specialisation

Answer 5

Workers become efficient at tasks they perform regularly
Less time is wasted moving between different tasks
Less time is needed to train workers for particular tasks
Some workers are more suited to particular tasks than others

Question 6

what is the main disadvantage of the division of labour

Answer 6

The main disadvantage of division of labour is that by specialising in narrow areas of activity work may become repetitive and boring for individual workers. It also makes workers vulnerable to unemployment if the demand for their skills disappears

Question 7

What does an economic system using the division of labour need

Answer 7

“market mechanism
monetary unit or currency

Question 8

What are the key characteristics of money

Answer 8

Acceptable
Portable
Divisible
Durable
Homogeneous
Limited in supply

Question 9

what are the functions of money

Answer 9

A medium of exchange
A store of value/store of wealth
A measure of value/unit of account
A means of deferred payment